The Financial Conduct Authority (FCA) is attempting to have Consumer Voice, the only consumer group advocating for higher payouts in the motor finance scandal, removed from court proceedings. The regulator alleges that the group's co-founders have not been transparent about their funding and potential conflicts of interest.
Legal filings reveal accusations
In legal documents filed on Wednesday, the FCA urged judges to dismiss a string of legal challenges, including those by Consumer Voice, because it has failed to provide a full and frank explanation of its own interest and that of its solicitors, Courmacs Legal. The FCA claims that both firms operate for profit in the sphere of claims management and that Consumer Voice has commercial incentives.
Consumer Voice, founded in 2023 by former Which? staffers Nikki Stopford and Alex Neill, is pushing for larger compensation for borrowers who were overcharged on car loans between 2007 and 2024. The FCA's current compensation scheme is estimated at £9.1bn, with an average payout of £830 per mis-sold loan.
Banks face massive bills
Specialist lenders and big banks, including Lloyds Banking Group, Santander, and finance arms of carmakers like Volkswagen and Mercedes-Benz, are on the hook for these payouts. Consumer Voice argues that the FCA scheme undervalues victims' claims and accuses the regulator of prioritizing lenders' concerns over consumer protection.
The FCA's legal filings suggest that Consumer Voice has not been honest about its relationship with Courmacs, which is providing pro bono services but could earn up to 30% of client settlements if payouts are higher. The FCA stated that Consumer Voice has failed to disclose details of its funding or the nature of its relationship with its solicitors.
Consumer Voice responds
Alex Neill called the FCA's allegations "disgraceful," stating that a public body should not include untrue claims in legal pleadings. She emphasized that Consumer Voice makes no money from car finance mis-selling referrals. The group partners with law firms to help consumers recover money from rule-breaking companies and has promoted claims against Amazon, Facebook, Mastercard, Apple iCloud, and Sony PlayStation.
The FCA urged judges to refuse permission for Consumer Voice to pursue its application, citing a lack of candor and potential misrepresentation. The case highlights the ongoing battle over mis-sold car loans, which has seen heavy lobbying by banks and intervention by Chancellor Rachel Reeves.
